Oregonís ESDs were impacted by a major piece of legislation in the waning hours of the 2005 legislative session. House Bill 3184 contained three primary components:

Shifts the current funding formula from 95% for K-12 districts and 5% for ESDs to a 95.25% for K-12 and 4.75% for ESDs, effective in the 2006-07 school year.

Requires ESDs to develop a local service plan and performance measures in consultation with their component districts.

Requires ESD board members in three pilot ESDs (High Desert, Northwest Regional and Willamette) to be appointed by their component school boards, by July 2006.

The shift in the school funding formula was a 5% reduction in funding for Southern Oregon ESD. We projected service level reductions in our three resolutions of School Improvement, Special Education and Technology and Media, based on a state funding level of $5.0 billion. Fortunately, with the state funding forecast of $5.254 billion, we believe our 2005-06 service levels will be maintained in 2006-07.

The local service plan requires ESDs to work with component districts to develop annual regional plans with performance measures. The regional plans must include services for special needs students, technology support, school improvement services and administrative support services. SOESD has three resolution areas, which correspond to the above categories. The process is still a bit vague, since the Oregon Department of Education has not developed the Oregon Revised Statutes that will guide the process. We hope to have clarity about this process in the fall and, during the academic year, implement new processes for the development of the 2007-08 service plan.

Three pilot ESDs have been identified to develop a new governance structure that will be studied over the next four years. The new model would require each of the pilot ESDs to divide its service area into five zones, determined by population and school districts. Community members in each zone would declare their interest in ESD board positions. School district boards served by the ESD would select representatives to the five zones. These five new board members would then select four additional board members representing higher education, social service, business and at-large. The pilot ESDs would then have a nine-member governing board. All this must be in place by July 1, 2006. Reports will be made to the legislature with the potential for all ESDs to be governed by selected rather than elected boards. Since it will take time for the new governance systems to be implemented and studied, it is unlikely that additional ESDs will be moving to this model until the 2010 legislative session.